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Report: Postal Service should continue door-to-door mail delivery, divest the rest

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By Bloomberg News
Thursday, March 14, 2013, 8:00 p.m.
 

WASHINGTON — The Postal Service should consider keeping door-to-door delivery while privatizing the rest of its operations, says a panel led by former Government Accountability Office head David Walker.

The agency, which lost $15.9 billion last year and exhausted its $15 billion borrowing limit, should consider expanding partnerships with the private sector, says the report released Thursday by the National Academy of Public Administration. The Postal Service already partners with companies, including FedEx Corp. and United Parcel Service Inc.

“We do believe that this deserves serious consideration,” Walker said.

The recommendations in the report could lay the groundwork for a new business model for the Postal Service, which plans to end Saturday mail delivery in August over objections from some members of Congress.

The academy report recommends carefully reviewing the proposal that the Postal Service should get out of mail sorting and transportation, leaving the tasks to companies that can do the work more efficiently.

By law, the Postal Service has a monopoly on delivering mail to boxes at homes and businesses.

The Walker-led panel analyzed a paper written last year by a former postmaster general, a former postal union leader and a former postal regulator. The 2012 paper suggested divesting operations other than last-mile, door-to-door delivery by letter carriers to cut operating costs by more than half from $67.5 billion in the 2012 fiscal year to about $30 billion,.

Shrinking the Postal Service, though, would require further study and would not solve all of the service's “challenges,” the Walker-led report concludes. The panel cautioned that privatizing postal operations would “generate new challenges.”

“We agree that the current business model of the Postal Service is unsustainable,” David Partenheimer, a spokesman, said. “That is why the Postal Service updated its five-year business plan last year to include expanded legislative reform proposals and actions that the Postal Service can and continues to take under existing law to reduce costs and grow revenue.”

Walker's group questioned the 2012 report's conclusion that a private partnership model “is tested, readily available and politically feasible.” Lawmakers have pushed the agency to return to profitability but are standing in the way of ending Saturday mail delivery and of closing post offices or mail-processing plants that serve or employ their constituents.

The academy is a nonpartisan organization chartered by Congress to assist federal, state and local governments in improving their accountability.

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